Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

Losses earlier in the week were made up on Wednesday as oil prices reached $50/barrel despite news of higher than anticipated US stocks. Reports now show a 6.5% drop in demand for petroleum products in the US from the same period last year. Head of Trading at Total estimates that 100 million barrels of oil are now being stored at sea, a situation which is being supported by a ‘contango’ – a profitable gap between current and future prices large enough to justify storage costs.

A possible gap in the UK Chancellor’s budget is the concern of many commentators as they dissect Wednesday’s budget speech. Alastair Darling announced record peacetime spending deficits, but even these depend on economic recovery from the end of 2009. This, according to IMF forecasts, is a highly optimistic scenario.

The budget included a number of measures around energy. There was a package for renewables, the first legally binding CO2 targets, and tax breaks to incentivise UK oil and gas production. One significant announcement was however saved for Thursday when the government gave the go ahead to four new coal-fired power stations to “demonstrate” CCS. With CCS not yet commercially viable this remains a controversial step.

The key transport measure announced in the budget was a £2000 scrappage incentive scheme for older cars. While put forward as a green initiative, in the absence of any matching investment in sustainable transport options, this looks more like a boost for the ailing car industry.

Guest commentary this week comes from Dr Gary Kendall, author of the WWF report Plugged in: The end of the oil age. The government’s other recent incentive measure for cars, this time electric cars, continued to receive press coverage this week. Here Dr Kendall demolishes the mis-reporting around the technology while pointing out that electric cars need to be part of a broader solution.

Oil
Oil Little Changed as U.S. Supplies Climb to Highest Since 1990
Near 100 mln bbls oil stored at sea
Deepwater-Rig Use Slows on Economy, Oil Prices, Says Transocean
Oil sands braces for American green fuel regulation
New North Sea tax regime aims to boost production

UK
Greenhouse gas emissions will be cut by a third in world's first carbon Budget
Budget: Power boost to wind and oil
Scrappage & petrol: Petrol price hikes will put cash in No 11's tank
The Great Green Con: Labour's climate measures mainly hot air